Friday Highlights

Good day. Well, I didn’t get an essay out last night. I over-estimated the time I’d have to write with so much family visiting to do. Anyhow … we played the game Munchkins a few times, much fun was had by all.

18 comments

Slight problem with the chaps case, the SC never said it was a tax. 4 Justices said it wasn’t a tax and Constitutional. 4 Justices said it wasn’t a tax and was unconstitutional. 1 Justice said it was a tax and Constitutional.

While the ‘it’s a tax’ Justice cast the deciding vote, the idea that it is a tax clearly wasn’t adopted by the court.

As for it being an unconstitutional tax, I think the argument is pretty problematic. As far as I can tell it’s a tax that only impacts your tax refund….in other words absent anything else, you aren’t actually paying the tax. In that sense it’s more like a tax deduction which would mean every other tax deduction would have to be looked at as a kind of mandate. Is the mortgage interest deduction a ‘mandate tax to have a mortgage’? Why not? For most it reduces their tax bill by much more than complying with the mandate will. Even the deduction for giving to Church and/or charity, can easily trump the mandate if you’re tithing or giving a serious sum.

Not going to take that bet because both of us know it’s a loser. Until we reform these entitlements we’re headed off a much bigger cliff than anything we’ll face in February. We have got to stop the growth of entitlements or we’re headed towards permanent decline and all that goes with it.

Entitlements are overblown IMO. Cash based entitlements (social security, food stamps, unemployment) either swing with the economy or are following very stable paths requiring at most minor tweaks in the distant future. Medicare is the only real problem but it’s more an artifact of the model than real IMO.

Health care has been increasing faster than the economy has been growing. That in itself is normal. Economic growth is just an average. In any average you have some things that are above the average and some things that are below the average.

Since Medicare’s revenue is linked to the average of economic growth, you have a long term projection problem. But here is what I think gets missed. A member of the group cannot grow faster than the average forever. If it does then it starts getting so big that it becomes the average.

What this means is that if you want to assume the economy will grow 2.5% for the next ten years and health care 6% based on the last ten years….go ahead. But if you want to assume it will go on like that for the next 30 years, you’re going to have confront the fact that health as a portion of the economy will have to grow and at some point force up the growth rate….or health’s rate must fall. If you raise economic growth projections or lower health care growth projections, a lot to all of the problem disappears.

Another way of looking at it, if you and your family pack up the camper and start heading west from NYC going 100 miles each day, it’s prefectly reasonable to project in about 24 days you’ll be in LA. It’s perfectly unreasonable to project that in 26 days you all will be drowning in the Pacific Ocean.

This is probably also why the market seems profoundly unmoved by all the dire claims of impending doom.

Boonton,
Except that entitlement promises aren’t limited as you suggest. Entitlement promises are not (as you suggest) banked on the proportion of those collecting to those contributing, which is why in the late 50’s SS payments were 1-2% of salary and are now 15%.

The market is profoundly unmoved because they have no where to go, not because they aren’t worried.

4 Justices said it wasn’t a tax and Constitutional. 4 Justices said it wasn’t a tax and was unconstitutional

And the swing vote gave they “it’s not a tax but is Constitutional” … he offered, it being Constitutional depended on it being a tax and the 4 who had said it was Constitutional deferred (which is why that was the controlling opinion). Ergo. It’s a tax.

As for it being an unconstitutional tax, I think the argument is pretty problematic.

Which is where the argument now rests. So …. what was his argument for why it was an unConstitutional tax and did your objections deal with that?

Nice job, Boonton, of ignoring our ever-increasing deficits and mounting debt. The evidence is right in front of you if you care to see it.

bty, the market is not reacting because it sees short-term. Further, what we face is not a cataclysmic catastrophe but slow long-term decline. Eventually, yes, the clock will run out on the entitlements, and they’ll be severely cut back and taxes raised even more, but again it will be a gradual process. We are in a downhill spiral, not going over a single cliff.

I never said anything about entitlement promises being backed by past contributions. For cash based entitlements there is no ‘crises’. Even the worse case Social Security scenario has benefits humming along just fine at 75% of current levels basically forever.

The market is profoundly unmoved because they have no where to go, not because they aren’t worried.

Nowhere to go? Why do you think the market is unable to price long term bonds correctly?

Re Taxes:

Ergo nothing. SC decisions address the case at hand. A good decision provides reasoning that lower courts can use to guide them in future cases that they encounter. But there’s nothing that requires any particular decision will be useful…esp. if the justices agree on a decision but disagree on the reasoning. There have been cases, for example, where every justice voted for one side but each wrote their own concurring opinion leaving no unity on the reasoning behind the decision.

This means if there’s a future case, say one that argues a child tax credit is really a tax on the childless, the health care decision is unlikely to provide much support to the ‘it’s a tax’ side.

Which is where the argument now rests. So …. what was his argument for why it was an unConstitutional tax and did your objections deal with that?

Yes my objections did deal with that. Thanks for asking!

Tom

Nice job, Boonton, of ignoring our ever-increasing deficits and mounting debt. The evidence is right in front of you if you care to see it.

Ooooh, what follows damned lies but (bad) statistics. Let’s see, blow up the deficit to incredible levels with stimulus spending and bank bailouts and then … low and behold, record deficits in the following years are evidence of the deficit dropping.

Yes my objections did deal with that. Thanks for asking!

Actually, I’m pretty sure you left his arguments untouched. Let’s check. Here’s your argument, in toto (your Constitutional argument that it wasn’t a tax I dismissed).

As for it being an unconstitutional tax, I think the argument is pretty problematic. As far as I can tell it’s a tax that only impacts your tax refund….in other words absent anything else, you aren’t actually paying the tax. In that sense it’s more like a tax deduction which would mean every other tax deduction would have to be looked at as a kind of mandate. Is the mortgage interest deduction a ‘mandate tax to have a mortgage’? Why not? For most it reduces their tax bill by much more than complying with the mandate will. Even the deduction for giving to Church and/or charity, can easily trump the mandate if you’re tithing or giving a serious sum.< ?blockquote>So, you claim it’s Constitutional because it’s a tax rebate not a tax and every other deduction would be similarly challenged if it was un-Constitutional. So, what are his objections and did you deal with them (section II of his brief).

His claim is that the Obamacare statute is a claimed to be Constitutional because it is not an ‘unapportioned direct tax’ but his counter argument rests in the arguing that the argument that this is a legal unapportioned direct tax is flawed.

Another argument (as a tax .. direct or not) that he presents is that all taxes must originate in the House. This did not. The weasel tactic the Senate did to Amend and squeak through without resubmission to the house means as a tax, this will not stand because of that legislative sleight of hand means it could not be a tax bill.

There may be good counter arguments but “not a tax” isn’t one (as I showed) and while there may be loopholes in Mr Sandefur’s brief “it’s like a deduction” doesn’t fit the bill.

Ooooh, what follows damned lies but (bad) statistics. Let’s see, blow up the deficit to incredible levels with stimulus spending and bank bailouts and then … low and behold, record deficits in the following years are evidence of the deficit dropping.

This does not do anything to increase the truth value of the statement “deficits are ever increasing” when they are decreasing.

But let’s keep in mind the court did not speak with a majority voice on the reasoning for the law’s constitutionality. A plurality, though, argued that it was constitutional via the commerce clause, only one justice argued it was a tax.

Congress has long gotten around the requirement by pasing ‘shell bills’ in the House and amending them in the Senate.

And you pretend the House would pass such a shell bill?

I skimmed the paper but the author dismisses the obvious fact that the mandate would fall under the income tax, if the court had found it was a tax.

Because the tax is obviously not related to income is why its not an income tax.

Again, you didn’t address his argument(s) even when claiming you did. I don’t think you have yet.

This does not do anything to increase the truth value of the statement “deficits are ever increasing” when they are decreasing

Let’s see. Consistency remains the bugbear of small minds I think. You claim that many claims of the increase/decrease of global temperatures depends finely on “when you start” measuring are bogus. Yet you make the same claim and its not.

But as it was drafting the Act in 2010, Congress used a procedural maneuver called a “shell bill,” in which the Senate took a bill that had already been passed by the House, and amended it to strike out all of its language and replace it entirely with new language. The bill—H.B. 3590—began as the “Service Members Home Ownership Act of 2009,” introduced in September, 2009.48 That bill was passed by the House and sent to the Senate in October, 2009. But on November 19, 2009, Senate Majority Leader Harry Reid submitted an “amendment” which struck out everything in the bill and replaced it with what became the Patient Protection and Affordable Care Act.

This has been the practice for years, take a House bill and amend it then give it back to the House to pass after you passed it.

Because the tax is obviously not related to income is why its not an income tax.

Questions: Does the tax apply to a person with no income? I don’t think it does.

You claim that many claims of the increase/decrease of global temperatures depends finely on “when you start” measuring are bogus

‘Ever increasing’ means continual increase with no breaks along the way. That plus the Obama administration has only been in office a few years whereas the Global is going on 4Billion or so. If you want to talk about where the Obama administration should go with deficits, you don’t have that many choices for where to start and stop the clock.

In response to your Global warming link, the answer is when is it reasonable to start the clock which applies here too. If this years deficit is lower than last years, then that should be noted instead of falsely claiming deficits are ‘ever increasing’…esp. if your frame of desired action is limited to the next year or two. When talking about global climate it is you who tries to cite a single datapoint to paint a picture of global non-warming or even cooling.

I don’t think we are understanding each other. The Constitution required only that revenue bills *originate* in the House. The health care bill did originate as H.B. 3590 in the House. In the Senate it’s provisions were amendment and then passed, which then passed the House (since in the end both chamber has to pass the exact same final wording).

The House had the exact opportunity to ‘block the bill’ that the Senate did. They simply had to vote it down in its final version. Instead they passed it. So you neither have a case that the origination clause was violated or the bill didn’t really pass the House.